Sanitation and the Rural Housing Infrastructure Programme: Departmental update briefings

Meeting report

Chairperson’s opening remarks
The Chairperson said the meeting intended to deal with the turn-around strategy of the Department of Human Settlements (DHS or the Department), but there had been miscommunication between her office and the Department, and so it was decided instead that this meeting should address more information on the current strategy of the department, as there were many issues that remained unanswered from previous meetings. The Department had not verified some of the details requested by Members, but that issue had been dealt with, and there would be further communication with the Director General of the Department on that point.

She noted that this meeting would address the issues around the Rural Housing Infrastructure Programme (RHIP) since a number of questions had remained unanswered from the previous week’s meetings.

Mr J Steyn (DA) said the Director General should not be waiting for a correspondence or a call from the Chairperson’s office before responding on issues that the Department had already promised to clarify. In the previous meeting there were no fewer than six officials who were taking notes. He had understood that those notes and requests would be referred to the principals, to inform them what had transpired at the meeting, and that in future the Department should clearly understand that whatever the Committee had requested in meetings should immediately be forwarded to the Committee, without the need for any further feedback from the Committee.

The Chairperson agreed in principle, but said some issues were too complicated for the officials to answer themselves, and sometimes even Members were confused about them. The officials might take notes, but the Director General still had the right to clarify matters, or seek explanations from the Office of the Chairperson. She did not think that this would be a problem again in the future.

Ms D Dlakude (ANC) agreed there was nothing wrong in requesting clarification from the Chairperson’s office. The Committee could not rely on officials taking notes on some pertinent issues. The Committee needed to be specific as to what it wanted from the Department.

Department of Human Settlements report-back
Mr Thabane Zulu, Director General, Department of Human Settlements, apologised for not attending the previous meetings, but confirmed that he would receive regular briefings from those who had attended on what had been discussed in the meetings. The Department would make itself available to discuss the turn-around strategy and other matters. He also assured the Committee that the Department would make a presentation on sanitation, which was a critical matter for the Department.

Rural Housing Infrastructure Programme Report
Mr Neville Chainee, Chief Operations Officer, DHS, said that much of the presentation on the Rural Housing Infrastructure Programme (RHIP) focused on the Independent Development Trust (IDT), a state entity contracted by the DHS to assist with the implementation of the RHIP. The IDT would be allocated R415 million to construct 53 000 units over a three year period.

Following the technical advice the Department received, IDT had been advised to finalise the 2010/11 backlog in the first quarter of the current financial year. A commitment was given in July that IDT could also now commence with the 2011/12 phase. The Department was keen to have the backlog cleared, and in this regard Mr Chainee pointed out that, like many other programmes in human settlements, there was a great need to have good community liaison. The IDT had taken a lot of time to introduce the concepts to municipalities, and this was not always appreciated. Not all consultations were properly held, but the DHS was addressing that issue. The Mvula projects were continuing satisfactorily and in line with acceptable timeframes.

The Department was not satisfied with the performance of IDT. There were a lot of technical and legal issues that the Department had to consider, in order to apply corrective measures. He urged the Committee to grant the Department permission to decide how best to deal with the issue, as there were a number of corrective steps that could be followed.

Mr Chainee said IDT had since delivered 1 574 units, against the target of 16 870, for the year, but the Department wanted to verify that information. He said the Department had instructed the project management team to conduct quantity surveyor tests to determine the real delivery. This was necessary, given the negative variance in the actual output last year and in the first two quarters of this financial year. The quantity surveyor tests would guide the Department on what steps must be taken to improve delivery performance. The poor performance by IDT had triggered the Department into preparing the matter for technical and legal assessment to ensure that corrective measures were implemented. The Department would advise the Committee on operational management steps to be taken to improve IDT’s performance.

Discussion
Mr Steyn said IDT was showing a similar pattern in performance as it had in the previous year, and its output would not increase to an acceptable level. He said the recovery plan was flawed, because it sought to increase performance in December and January, a time that was generally a holiday period for most construction employees.

Mr Steyn asked if there was a penalty clause in the contract to provide what should happen when the service provider failed to perform the required tasks. There should be legal consequences for IDT, as it made no sense that only the DHS should bear legal implications. He said that even if the Department could not terminate the contract, it surely could change the scope of the work.

Mr Steyn asked why extra service providers were not appointed if IDT was not coping. He asked why Mvula’s allocation, in terms of the contract, was not increased, noting that it had met the targets.

Mr K Sithole (IFP, Member of KZN legislature) asked if it was not possible to arrange a joint meeting between the Departments of Public Works (who was responsible for IDT as an entity) and the Department of Human Settlements. There were glaring discrepancies between the IDT and DHS reports.

Ms D Dlakude (ANC) wanted to know if the previous year’s work was finished at the time that the DHS had allocated IDT’s 2011/12 budget in July. She queried the numbers provided for the work done, and wanted to know how was it possible that IDT could build over 800 units in the first two weeks of November, if it had built only 100 in September. She also noted that by the end of this month, the Committee had been promised that another 2 000 would be provided and she wondered if this was possible. She asked where the Committee would find these units.

Ms J Sosibo (ANC) asked for the breakdown of the 600 units that were allegedly built in October. She wanted to know more about the claim that IDT had spent time with municipalities, and how long this process took.

Ms Sosibo agreed with Ms Dlakude that it did not seem possible for IDT to build 800 units in two weeks.

Ms G Borman (ANC) asked for a breakdown of the R12 million allocated for project management. She asked if under spending from last year had been dealt with. She said she was puzzled by the recovery plan, and wanted to know if funding was available for the units. She also asked for clarity on whether any of the 2010/11 units formed part of the recovery plan. Ms Borman also asked where the units were located in the various regions, as the previous presentation indicated that some regional offices did not have staff.

Mr R Bhoola (MF) said it was of concern to him, but also a revelation, that the DHS was not happy with the offerings of IDT. HE asked how the DHS intended to enforce measures that IDT had to follow, in order to speed up delivery and catch up on the backlog. He asked how the Department was involved in trying to restore sanitation services in provinces that were hit by floods.

Mr M Matshoba (ANC) said previously the Department was previously given a clear mandate to instruct IDT to finish phase one of the project and, in the meantime, seek legal advice on terminating the contract. He asked where this process was.

The Chairperson said the Department should clarify the issue of the completion date. In the previous week the Committee had received a report that said the sanitation programme would continue until 2014; but the presentation given today suggested that the project would continue until 2013. She pointed out that the terms of the programme were to provide sanitation and water to rural communities. The report, however, was silent on the provision of water. The report appeared now to indicate that the programme was just about providing toilets. She asked when DHS would start with the implementation of the directive from National Treasury to roll out the provision of water.

The Chairperson agreed with the comments of other Members on the awarding of a contract to an entity that failed to perform. The Committee was aware that IDT always asked Mvula Trust to do work on its behalf, because Members interacted with people in their constituencies. This Committee would never be convinced with any reports about the performance of IDT.  

The Chairperson was critical of the Department for not adhering to the recommendation that legal advice be sought on terminating the ongoing contract with IDT. The Department had merely reported that it had decided to hold over that recommendation, and in a sense this amounted to the DHS telling the Committee that it was not bothered with implementing that recommendation.

The Chairperson also wanted to know how the DHS could be threatened by the IDT, another State entity, with legal proceedings should the DHS want to terminate a contract. The departments were not consistent in their approach. The Committee had at one stage been told that DHS was unable to take the Department of Public Works (DPW) to court on the Servcon matter, but now IDT, a government entity was threatening to take the DHS to court. Inter-departmental litigation processes were not clear.

The Chairperson said RHIP was creating dissonance, and was straining relations between the Department and Parliament. The Department should not allow IDT to impact negatively on its harmonious relations with Parliament. The recovery plan was unacceptable, and thus the Committee rejected it. The Committee reiterated its recommendation that legal advice must be sought by DHS on the termination of the contract with IDT.

Mr Zulu responded in general terms to the various questions and comments by the Committee. Firstly, he noted that the DHS was not trying to convince the Committee that IDT was an entity capable of providing the services, and he was not attempting to protect the integrity of IDT. He, as an accounting officer, would not promote entities who failed to delivery.

He agreed with the Chairperson that the RHIP programme was not managed effectively. The process of procuring the services for this work started late, and it was not possible to procure in the same year that the budget had been allocated, so the programme had started from the wrong premise. Communication with the service providers was haphazard, and it resulted in the challenges that were now seen.

In regard to the legal action, Mr Zulu said that the DHS could not afford to take the risk of suing IDT for failure to deliver on the contract. The DHS had failed to use its own budget allocated for this programme. The recommendation by the Committee to seek legal advice was not shelved, but DHS had to ensure that it had strong legal grounds to proceed, prior to executing that recommendation.

Mr Zulu noted that the Department had given an instruction to IDT, in July, with clear service delivery targets, and had also told IDT that it should not proceed with any work relating to the current year’s targets until it had cleared the backlog to the satisfaction of the DHS. However, there were challenges in relation to this, and he did not want to mislead Parliament. The quantity surveyor’s report that the DHS was now seeking would determine what steps should be taken next. This would include its reaction to the recommendation of taking legal advice on possible remedies. It was important that the DHS must receive scientific information to help it understand what IDT could deliver, and against what timeframes, given its current capacity. The DHS’s commitment to consider the Committee’s recommendation on legal steps to pursue the matter remained.

Mr Chainee agreed with Mr Zulu that the Department was not displaying any reluctance to pursue that recommendation, but did want to stress that there was a need to ensure that everything was correct, on the legal and the technical side. It would have been a flawed process should the DHS have instructed IDT to complete the 2010/11 phase, and yet institute legal proceedings at the same time. The Department was not scared of the IDT, but had to be cautious.

Mr Phillip Chauke, Chief Director, DHS, noted, in response to the queries on the figures, that the DHS had engaged with service providers on the possibility of contracting with employees to work through the festive season. There were contingency plans to provide contractors with materials for the top structures before the factories closed. This was a standard practice in the construction industry.

Mr Chauke told Members that there was no penalty provided for in the contract that the DHS had with IDT, but there was a provision allowing DOH to review the contract. IDT’s performance for 2010/11 was sitting at about 80%. He said the decision to allocate a budget to IDT in this year, in line with the Director-General’s directive, was correct. The reason why IDT performed so fast in the first two weeks of November was because it was only dealing with construction issues. When the programme started around July, IDT was engaging with two separate processes, firstly, making the introductions to Water Services Authority (WSA) and municipalities, which were exhaustive and over elaborate, requiring much time. The second process had involved informing individual households on the beneficiary list that the Department would be assisting them in building toilets. He said this was social facilitation, as the Department could not just go into individual households and dig holes.

In respect of sanitation, Mr Zulu noted that it would be in the Department’s interest to deliver sanitation to rural areas and it remained tied to this commitment.

Mr Chainee explained that it was difficult to fix exact timeframes for social facilitation on the sanitation programme could not be given specific times. Although the agreed period was 15 days, there were dynamics that led to time over-runs. He said the Department was neither misleading Parliament nor contradicting itself on the completion date, and that the programme would be running until the end of the 2013/14 financial year.

Mr Chainee said there were a number of issues that the Department had to deal with when it came to sanitation. These issues were sensitive, and included interaction with regional offices, project management capabilities and others. Following engagements with other departments, the water programme would be rolled out along with other essential services like electricity and solid waste removal.

Mr Chainee reminded Members that the Cabinet had taken a decision that the 22 municipalities that had a less than 30% penetration of services would receive attention before the end of this administration’s term of office. Provinces had indicated their intention to be more involved, and this would improve some of the deficiencies.

The Chairperson picked up on the comment by Mr Chauke, and wanted to know if it was the Department’s responsibility to go into households informing them of pending projects that would be delivered.

Mr Chauke replied that, from an administrative point of view, the Department should contact communities, but from a political point of view the councillors should be attending to this.

The Chairperson sought further clarity on social facilitation. She said millions of rands were spent on social facilitation, and this was raised on a previous occasion with the Department. From the beginning, the Committee had queried this process, and she wanted Mr Chauke to explain to Members how exactly the social facilitation would work.

Mr Chauke said DHS introduced the programme to the Water Service Authorities (WSA), who in turn had to coordinate with local municipalities. The WSA and the Municipality would then create a list of beneficiaries, together with the local councillor. WSA then prepared a consolidated list, which would in turn be submitted to the Department, and allocations would be done from this list. He said that calling meetings with the communities formed the political aspect of the programme, and this was left to the councillors to arrange. However, the Department had a responsibility to visit every household and inform them about the pending project.

The Chairperson wanted to know where Community Development Workers (CDWs) and ward committees fitted into this process.

Mr Steyn said two tenders were awarded for the project management services of RHIP, but were not mentioned in this report. He said that one of these tenders, worth R41 million, was awarded to Maxima Global. If this company was supposed to project manage RHIP, then he questioned why its name was not mentioned. The work involved liaising with the communities. He said the Departmental website indicated that another tender was awarded for liaison services, with nine rural municipalities.

Ms Dlakude objected to these questions, and said the Committee needed not discuss something that did not form the subject of a presentation. She thought that it was not correct for members of this Committee to source information from the internet. Her understanding of social facilitation was that the Department would visit on a municipality, and councillors would be invited to a meeting, after which the councillors were expected to call ward meetings to inform beneficiaries of the project. Contractors would merely grace these meetings with their presence, thereafter the DHS itself was expected to carry out the project. The process in the rural areas did not happen as the DHS officials had set out.

The Chairperson ruled that it was not out of order for Members to source relevant information from the internet, for the purpose of preparing for Committee meetings.

The Chairperson agreed that social facilitation, as it pertained to project implementation, involved only the beneficiaries, and the door-to-door process described would only raise the costs. The Committee had to monitor the use funds, in line with its Constitutional mandate. She asked if the steering committees had any role, as they were dealing with people on the ground. She felt that the social facilitation that the DHS was doing merely led to unnecessary spending of government money.

Mr A Figlan (DA) said the door-to-door way of communicating with communities was new and was of concern to him, especially that there were other established ways for municipalities to communicate information to the people.

Mr Chainee suggested that the Department should prepare a presentation on the community participation model that was applied for sanitation. He said the Department would also prepare a presentation on the community facilitation model on human settlements, as a separate subject. The Committee needed to be aware that, depending on the local authority and the ward councillor, there were certain dynamics to the implementation phase. He said DHS would provide the model and would clearly define roles.

The Chairperson said the Committee looked forward to a presentation on social facilitation. She appealed to the Director General to take the Committee fully into his confidence in relation to the spending of public money. She reiterated that the Committee was not convinced about the claims that the IDT had performed, and it was not justifiable for it to claim that it had started late on the projects. She still doubted that IDT could meet its commitment to finish a full year’s project in three months, and said that IDT needed to be honest and not commit itself to something that was not achievable. She also noted that all committees in Parliament were complaining about the quality of work by IDT, and it should not be awarded any further contracts by DHS.

The Committee noted that the Committee expected to see evidence of the 800 toilet units that the presentation suggested were built in the first two weeks of November, and warned that the DHS should be careful, as it did not have money to fix shoddily-built structures.

Ms Borman also doubted if there were funds to supply all the required units. She said the Committee did not want to appear to be micro-managing the Department, but that would not have to happen if proper reports were provided.

Mr Zulu thanked the Members and assured them corrective measures would be taken and reported upon. This project was a priority for the DHS.

The meeting was adjourned.